New Recording Requirements; Compliance Deadline: December 21, 2013

The CFTC has amended its Rule 1.35 to require futures commission merchants (FCMs), certain introducing brokers (IBs), retail foreign exchange dealers and certain other registrants to record all oral communications that lead to the execution of a transaction in a commodity interest. The new rule became effective on February 19, 2013, and compliance with the new oral communications recordkeeping requirement must be implemented by December 21, 2013.

At the Chicago NIBA Conference on September 18, 2013, the Legal Update Panel will be discussing a number of new rules and what they mean for industry participants. Among other topics, the discussion concerning amended Rule 1.35 will include:

  • which IBs are exempt from the new oral communications record keeping requirement;
  • how industry participants may obtain relief from the CFTC in the form of an alternative compliance schedule;
  • protective measures that registrants should consider implementing to avoid running afoul of state and federal wiretapping and privacy laws;
  • additional requirements concerning the retention of written communications;
  • alternative methods of managing communications over personal telephones and other communication devices;
  • record storage and retention options; and
  • recommended revisions to customer agreements, brokerage agreements and compliance manuals.

About the Author
Jeffrey E. Kopiwoda is a Partner at Funkhouser Vegosen Liebman & Dunn Ltd. (FVLD). A fifteen year veteran of the futures industry, Jeff advises FCMs, IBs, pool operators, trading advisors and other futures industry participants on both regulatory and general legal matters. Jeff is a member of the Legal Update Panel for this year’s Chicago NIBA Conference, and may be reached directly at +1.312.701.6820 | [email protected].

This publication is merely informational and does not constitute legal advice.

The Opinions expressed are the opinions of the author. The opinions, the trading styles, trading information and trading programs are not endorsed by the NIBA, but are the individual opinions, styles, information and programs of the author.